Highlights
- Unilever’s chief financial officer, Graeme Pitkethly, cautions that extreme heat may deter ice cream sales.
- Warm weather in June boosted out-of-home sales, but recent heat waves in Europe could shift consumer preferences to cold drinks.
- In-home ice cream sales were muted in the first half due to inflation and reduced non-essential spending.
- Unilever’s overall ice cream sales grew 5.7% in value terms, driven by price increases despite a slight dip in volumes.
- CEO Hein Schumacher warns of potential food price volatility due to agricultural commodity markets.
Unilever,
the world’s largest ice cream company, has highlighted a surprising impact of heat waves on ice cream sales. According to the maker of Magnum and Cornetto, there is a “sweet spot” for temperatures that drive consumer interest in frozen desserts. However, when the weather gets too hot, people tend to opt for cold drinks instead, impacting ice cream sales.
Europe experienced a surge in out-of-home ice cream sales after a cold spring, but recent scorching temperatures have raised concerns. Health officials have advised residents and tourists to stay hydrated and indoors to cope with the extreme heat, leading Unilever to predict a potential dip in in-home ice cream sales during the first six months of the year.
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Despite these challenges, Unilever’s overall ice cream sales increased by 5.7% in value terms during the first half of the year, with prices being the primary driver of growth. The company, also known for brands like Ben & Jerry’s, Carte d’Or, and Breyers, holds a significant share of global ice cream sales.
Unilever’s CEO, Hein Schumacher, addressed analysts regarding future uncertainties in agricultural commodity markets, including the impact of the Ukraine war on wheat prices and drought effects in southern Europe. Despite potential challenges, Unilever raised its revenue growth forecast for the year to over 5%.
Shares in the company surged by 5% following the optimistic forecast. Schumacher, who recently assumed the role of CEO, expressed determination to unleash Unilever’s full potential and will unveil his plans for the business in the upcoming third-quarter earnings report in October.
